bussiness chapter 123

Which of the following is an example of a lifestyle business?

A self-employed landscape designer.

A corporation is a legal entity distinct from the persons running the corporation.

True

A sole proprietorship

is owned by only one person

is the term used to describe the difference between revenue and expenses.

Profit

is money that an organization brings in through the sale of its goods and services

Revenue

The European Union has created a currency of its own.

True

A business plan is a written document that summarizes the

proposed business venture, goals, and plans for achieving those goals

Which of the following combines the benefits of independent business ownership with the support of a large organization?

Buying a franchise

Consumers have the right to buy safe products, and to buy them safely. Who enforces this?

Consumer Product Safety Commission

Which of the following is a characteristic feature of economic contraction?

decreased consumer spending

How are taxes paid in a partnership?

By each partner based on their individual profit.

_ is the study of how a society uses scarce resources to produce and distribute goods.

Economics

Conflicts of interest involve business decisions that might be influenced by the potential for personal gain.

True

Who is responsible for the long term plans and major strategic decisions of an organization?

board of directors

A(n) ________ is a framework of how a business intends to generate revenue.

business model

In a(n) ________, two companies create a new, third entity that then purchases the two original companies.

consolidation

Outsourcing reduces opportunities for small businesses and entrepreneurs.

False

Owner has limited personal liability for the business's financial obligations in sole proprietorships.

False

is the quality of performing at a high level and conducting oneself with purpose and pride.

Professionalism

At the federal level, small businesses can apply for loans backed by the ________.

Small Business Administration

The number of units of one currency that must be exchanged for a unit of the second currency is known as the ________ between the currencies.

exchange rate

If individuals and companies believe they can pursue rewards without facing the risks that should be attached to those pursuits, they are more likely to engage in irresponsible and even unethical behavior. This situation is known as a(n) ________.

moral hazard

A(n) ________ is an unincorporated company owned by two or more people.

partnership

Entrepreneurs often have a talent for inspiring others, or ________ for what they do.

passion

According to the ________ view, the only social responsibility of business is to pay taxes and obey the law.

strategic

Which Act guarantees equal opportunities in education and employment for those with health issues that require reasonable accommodation to perform certain job tasks?

Americans with Disabilities Act (ADA)

Which of the following is an example of philanthropy?

An IT company donates money to an orphanage without expecting any business benefits.

____ refers to some aspect of a product or company that makes it more appealing to target customers.

Competitive advantage

Which of the following is a goal of the World Trade Organization?

Discourage unfair practices.

Which of the following regulatory agencies is responsible for monitoring the hiring practices of companies and can require them to compensate individuals who have been victimized by unfair hiring practices?

Equal Employment Opportunity Commission (EEOC)

are the principles and standards of moral behavior that are accepted by society as right versus wrong.

Ethics

Business start-ups decline when the economy sours.

False

Ethnocentrism is the tendency to assign a wide range of generalized attributes to an individual.

False

In a free-market economy, companies generally have limited autonomy in deciding which customers they want to focus on and how they want to compete.

False

In the USA, the service sector now accounts for less than half of the nation's economic output, but most of all jobs in the country.

False

Macroeconomics studies economic behavior among consumers, businesses, and industries that collectively determine the quantity of goods and services demanded and supplied at different prices.

False

Profit refers to the money the company brings in through the sale of goods and services.

False

The degree to which information flows freely within an organization is termed as insider trading.

False

What is one major advantage of a small firm over a large firm?

Freedom to innovate and move quickly.

taxes, levied on the earnings of individuals and businesses, are the government's largest single source of revenue.

Income

Why is inflation a concern for businesses and consumers?

Inflation affects the amount of goods and services you can buy for a given amount of money.

Which of the following is a key advantage that corporations have over sole proprietorships and partnerships?

Investments in corporations have more liquidity than partnerships and sole proprietorships.

Which of the following is an advantage of buying into a franchise system?

It comes with an established business system.

Preparing a business plan serves which of the following functions?

It helps persuade lenders and investors to finance the business.

agreements entitle one company to use some or all of another firm's intellectual property in exchange for a royalty payment.

Licensing

What must employers do to comply with the Americans with Disabilities Act?

Make reasonable accommodations such as modifying workstations.

Which of the following best describes the department where the company's products are made, or its service is performed?

Operations

Which of the following activities is most likely to be considered unprofessional?

Posting critical comments regarding the employer in a personal blog.

activities are intended to identify new ideas that have the potential to result in new goods and services.

Research and development

Which of the following is one of the main reasons that small businesses are using social media for marketing and advertising?

Social media allows them to stretch their small advertising and promotional budgets.

lies somewhere between capitalism and communism, with a fairly high degree of government planning and some government ownership of capital resources.

Socialism

refers to assigning a wide range of generalized attributes to an individual based on membership in a particular culture or social group.

Stereotyping

refers to the quantities of a good or service that producers will provide on a particular date at various prices.

Supply

is defined as meeting the needs of the present without compromising the ability of future generations to meet their own needs.

Sustainable development

Why would the government lower the income tax rate?

To encourage consumers and businesses to spend money not paid in taxes.

refers to the degree to which information flows freely within an organization, among managers and employees, and outward to stakeholders.

Transparency

All businesses have the capacity to cause harm to employees, customers, other companies, their communities, and investors.

True

Among all firms that apply for U.S. patents on new inventions, small businesses receive more patents per employee than larger firms.

True

Capitalism is a term used to describe the free-market system, one in which private parties own and operate the majority of businesses and where competition, supply, and demand determine which goods and services are produced.

True

Comparative advantage theory states that countries should produce and sell to other countries those things it can produce most efficiently.

True

Culture is a shared system of symbols, beliefs, attitudes, values, expectations, and norms for behavior.

True

Economic development zones, established by governments, offer a variety of financial incentives to businesses that meet specific job creation and local investment criteria.

True

In large organizations, mechanisms put in place to prevent mistakes can also hamper innovative thinking by restricting people to tried-and-true methods.

True

Liquidity is a measure of how easily and quickly an asset can be converted into cash

True

Providing short-term loans to countries that are unable to meet their financial obligations is a primary function of the International Monetary Fund.

True

Unlimited liability is a legal condition under which any damages or debts incurred by a business are the owner's personal responsibility.

True

In a(n) ________, one company simply buys a controlling interest in the voting stock of another company.

acquisition

The money, equipment, and buildings that a business needs in order to produce goods and services are called ________.

capital

Businesses that need very large amounts of money, equipment, or other material resources in order to get started are ________ businesses.

capital-intensive

The economic system that allows individuals the least degree of economic freedom is

communism

The ________ measures the rate of inflation by comparing changes in the prices of a representative basket of goods and services such as clothing, food, housing, and utilities.

consumer price index (CPI)

What key aspect of running a business includes the ability to offer valuable goods and services while contributing to society?

corporate social responsibility

When the U.S. dollar is strong, U.S. exports will likely ________.

cost more in other countries

Which of the following refers to the amount of a good or service that customers will buy at a given time?

demand

Because they fundamentally change the nature of an industry, ________ can be powerful enough to create or destroy entire companies.

disruptive technologies

The positive, forward-thinking desire to create a profitable, sustainable business is called ________.

entrepreneurial spirit

Multinational corporations are companies that

establish a physical presence in multiple countries through foreign direct investment

A situation in which you must choose between two conflicting but arguably valid alternatives would be known as a(n) ________.

ethical dilemma

Profits of sole proprietorships ________.

flow directly to the owners

Publicity efforts that portray a company as being environmentally friendly when its actions speak otherwise are called ________.

greenwashing

The ________ function of a business involves the recruiting, hiring and support of its personnel.

human resources

The use of unpublicized information that an individual gains from the course of his or her job, in order to benefit from fluctuations in the stock market, is called ________.

insider trading

A disadvantage of the corporate structure is that it

involves strict reporting requirements

A potentially significant disadvantage of a partnership is that

it has more potential for disagreement and conflict

A company benefits from economies of scale when it ________.

manufactures and distributes products in higher quantities

In a ________, two companies join to form a single entity either by pooling their resources or by one company purchasing the assets of the other.

merger

Your professionalism, and how others view your efforts, is affected by your ________, and is a vital element in promoting workplace harmony.

personal demeanor

Which of the following authorizes another person to vote on behalf of a shareholder in a corporation?

proxy

The term ________ is defined as having two consecutive quarters of decline in the country's gross domestic product.

recession

What type of business tends to be labor intensive, relying more on human resources than material resources?

service

If the government owns many of the key industrial sectors, such as transportation, health care, and communications, but private ownership is allowed in other industries, what type of economic system does the country have?

socialism

All groups affected by a company's activities are referred to as its

stakeholders

What is the broad effort to minimize resource depletion and reduce pollution?

sustainability

Data that will persuade an investor that you understand the strengths and weaknesses of your competitors can be found in which section of the business plan?

target market

Taxes, surcharges, or duties levied against imported goods are known as

tariffs

International companies can use ________ to shield some of their income from higher tax rates in their own countries.

tax havens

Corporate social responsibility refers to

the notion that business has obligations to society beyond the pursuit of profits

A country has a trade surplus when the

value of its exports exceeds the value of its imports

Which of the following is a quality that a successful entrepreneur is most likely to have?

views failure as a chance to grow

A person's disclosure that exposes illegal or unethical behavior by others within the organization is ________.

whistle-blowing